"In all my years, I have never seen a loss of momentum of these proportions," he added. "It is clear to me JCPenney lost its core customer during the transformation."

And Loeb, 87, has been in the game a very long time. He covered retail at Morgan Stanley from 1974 to 1990 and was a director at the National Retail Federation, Wet Seal, and Gymboree, among other companies.

"In a videocast, JCPenney’s visionary CEO Ron Johnson promised there is a great day coming 'tomorrow,'" wrote Loeb. "But like the song says that 'tomorrow' never comes."

Now, Loeb is convinced that JCPenney's recovery will be "much harder" than Johnson and his senior management team claim.

Why?

Shrinking inventory provides less room for mistakes

JCPenney's core customer has run for the hills

Associate cuts have hurt their entire store and the environment is deteriorating

So, what does Loeb think about next quarter? It'll likely be the worst quarter of 2013 and sales haven't bottomed yet, he wrote.